California State Teachers' Retirement System plans to engage gunmakers and retailers about illegal firearm sales in California rather than immediately divesting from those companies.
The pension fund's board unanimously approved the plan on May 9. CalSTRS, which oversees a portfolio valued at $222.5 billion, will prioritize engaging with companies making or selling firearms, and may look to divest from such investments down the road.
"This plan advances a more public approach, to leverage the public pressure that has been mounting in this country in response to recent tragic gun violence," CalSTRS Investment Committee Chair Harry Keiley said in a statement.
By engaging with retailers such as Walmart Inc., Kroger Co. and Dick's Sporting Goods Inc., CalSTRS joins a growing number of U.S. financial companies and organizations that have become more critical of the manufacture and sale of firearms.
The uproar against gunmakers and retailers was sparked in February when a school shooting in Parkland, Fla., left 17 dead. Since then, assets managers including BlackRock Inc., Vanguard Group Inc. and State Street Global Advisors Ltd., revealed their intentions to also engage gunmakers and firearm retailers.
Big banks have also taken action against such companies. In March, Citigroup Inc. put new restrictions on its business customers that sell guns. A month later, Bank of America Corp. said it would stop lending to companies manufacturing assault-style guns used outside of the military.
CalSTRS had already taken action to rid its portfolio of investments in gunmakers. Following the Sandy Hook Elementary School shooting in 2012, the pension fund began divesting investments in two publicly traded U.S. gun manufacturers, CalSTRS said. Most recently, the pension fund said it liquidated its investments in Vista Outdoor Inc. in February after the company added a line of firearms that violated CalSTRS' policy.
For months, the pension fund has faced pressure to divest its holdings in companies selling assault weapons and bump stocks. California State Treasurer John Chiang, a Democratic candidate in California's 2018 gubernatorial race, urged CalSTRS and California Public Employees' Retirement System to divest from companies that sell them.
CalSTRS' decision could ultimately lead the pension fund's board to divest the holdings, if the talks do not go well, CalSTRS said in its statement.
At the end of 2017, CalSTRS held more than 2 million shares of Walmart stock, more than 1 million shares of Kroger stock and a little more than 100,000 shares of Dick's stock, according to S&P Global Market Intelligence data.